China Pinches Piracy Before Olympics But Hollywood Skeptical

As Secretary of Agriculture under President Bill Clinton, Dan Glickman was involved in helping to bring China into the WTO, a role that used to lead to open-arm greetings from Chinese officials. In his present role as CEO and chairman of the Motion Picture Association of America, in which he prods China to live up its new responsibilities, all that’s changed.  Hollywood estimates it loses $1.2 billion in Asia from piracy; almost of quarter of that in China. This is has been long-standing bilateral issue but China’s first known piracy conviction came just in late April.

Dan Glickman

How has your view of China changed as result and is China’s debut as host of the Olympics making a difference in your efforts?

I am much sober now in my view about China. The Chinese have a long, long way to go to meet their WTO requirements on intellectual property issues – in our industry or others. There has been some recent improvement. This may have to do with the Olympics. We’ll just have to wait and see whether these small improvements are sustained or is just for show. 

Do the Olympics offer any leverage?

Certainly the Olympics give us an opportunity to do some short-term clean up. My guess is that the streets of Beijing will be cleaner of pirated material than it has been in a very long time. I thought that the intellectual property issue would be at the front of the line going into the Olympics but other things are taking precedence, including Darfur, Tibet and now the earthquake. There were vast improvements in Korea [partly due to the Seoul Games in 1988].

Is the problem more about market access or enforcement?

Both.  There has been some improvement in enforcement, some progress modernizing their laws, but restrictions on the release of foreign films has not improved at all. By limiting legitimate access, if you want to see one of our movies you almost have to buy the pirated copies. Film piracy is very high – in excess of 90 percent. That’s highest in the world and that’s why the [US] government is pursuing WTO remedies.

Didn’t the WTO agreement spell out what is expected of China?

We negotiated 20 foreign films a year but that was a floor—which has now become a ceiling. The US share fluctuates but generally it has been around 14.

Theatrical releases also have very limited schedules. It is sometimes very difficult for a consumer to know when and where a movie is being shown. A film may play for three days and then they black it out because it is time for the Chinese movie of the week to come in there; it is not what you would call a predictable market.

If the Chinese obligations are pretty clear what do they say about the lack of results?

One thing they say is that we have a very large film industry, and they have a very small film industry, that it is going to take them awhile to become a competitive force; if we allowed all your movies it would saturate our market.  Some of this is cultural nationalism, which is a historical thing. Protecting culture is also important for them. The movies we do get in are censored. A lot of pirated product is Chinese, but most of it is ours because that’s what people want to see.

I understand you have made some personal inspections on the piracy issues in China.

There is one shop I visited several times. Every time I have gone they have shut it down and then reopened it after I left town. They call it Glickman’s shop; a least my team in China call it that.

My son is a film producer and [after seeing pirated versions of his films in Beijing] … when I was berating Chinese officials about piracy, I am sure they thought, ‘Okay, one more American (official) saying this’ – but then I said:  “This really makes me mad. This is my son.” That did seem to have some impact. They actually did pull a lot of those films.

This suggests that they do have the regulatory reach when they want to apply it?

Absolutely. The truth is that China is a serious problem for us. But the market is underdeveloped so while we talk about China and its importance is really based on the future.

© 2009 CNBC.com